Employment falls by 43,000 in June

Employment fell by 43,000 (down 0.2 per cent) in June, offsetting the increase of 40,000 recorded in May.

“This marks the first employment decline not associated with a tightening of public health restrictions since the beginning of the COVID-19 pandemic,” says Statistics Canada.

The unemployment rate reached a new historic low of 4.9 per cent in June, down 0.2 percentage points from the previous record in May. The total number of unemployed workers fell by 54,000 (down 5.1 per cent) to 1.0 million.

The employment loss was almost entirely due to a decrease among workers aged 55 and older (down 51,000; down 1.2 per cent). It was little changed among youth aged 15 to 24 and the core-age population aged 25 to 54.

Recession worries

Canada’s economy is headed for a recession, according to a report from RBC.

“Economic growth has fired on all cylinders following pandemic shutdowns. But a historic labour squeeze, soaring food and energy prices and rising interest rates are now closing in. Those pressures will likely push the economy into a moderate contraction in 2023.”

Businesses are struggling to find the workers they need to expand production, says the bank.

“There were nearly 70 per cent more job openings in June than before the pandemic — and those hunting for staff were forced to compete for almost nine per cent fewer unemployed workers. Meantime, soaring prices are cutting into Canadians’ purchasing power at the pump and the grocery store.”

However, by historical standards, RBC expects the slowdown to be “modest,” as a 6.6 per cent unemployment rate would still be more than two percentage points below the 8.7 per cent peak in the 2008-09 recession.”

With many economists warning of an impending recession, and inflation at a 40-year high, three out of four (78 per cent of) American workers are fearful they will lose their jobs, according to a survey from Insight Global, a national staffing services company.

Sectoral differences

Employment in the services-producing sector declined by 76,000 (down 0.5 per cent) in June, with losses spread across several industries.

The largest decline was in retail trade (down 58,000 or 2.5 per cent), erasing gains made earlier in the year, says the government. Compared with 12 months earlier, there were 67,000 (three per cent) more people working in retail trade in June.

In the services-producing sector, employment also fell in health care and social assistance (down 20,000 or 0.8 per cent), information culture and recreation (down 14,000 or 1.7 per cent), and educational services (down 14,000 or 0.9 per cent) in June. In contrast, employment was up in public administration (15,000 or 1.3 per cent).

In the goods-producing sector, overall employment rebounded by 33,000 (0.8 per cent) in June, following a decline observed in May (down 41,000 or one per cent).

The number of people working in construction grew by 23,000 (1.5 per cent), with Ontario (19,000 or 3.3 per cent) accounting for the majority of the increase, says the government. On a year-over-year basis, employment in construction grew at a faster pace (eight per cent or 118,000) than most other industries.

In manufacturing, employment rose by 26,000 (1.5 per cent) in June, partially offsetting a decrease of 43,000 (down 2.4 per cent) in May. Compared with 12 months earlier, employment in the industry was up by 37,000 (2.2 per cent) in June.

The sole industry in the goods-producing sector to see an employment decrease in June was natural resources (down 20,000 or 5.8 per cent).

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Provincial stats

Employment declined in June in both Newfoundland and Labrador and Quebec, according to Statistics Canada, but it rose in Prince Edward Island and Manitoba:

• In Newfoundland and Labrador, employment fell by 4,300 (down 1.9 per cent) in June, partly offsetting gains recorded in April and May.
• Employment in Quebec fell 27,000 in June (down 0.6 per cent), the second decline in three months.
• Prince Edward Island saw an employment increase (1,600 or 1.9 per cent) for the second consecutive month in June.
• Employment also rose in Manitoba in June (4,000 or 0.6 per cent)
• In Ontario, employment was little changed for the third consecutive month, while the unemployment rate fell 0.4 percentage points to 5.1 per cent.

More than half (55 per cent) are turning to larger than normal increases of wages while 66 per cent are increasing recruiting efforts, according to a report from the Bank of Canada.